Author: Ana Navarrete

Ana specializes in Oil and Gas litigation. Her experience includes matters in South Texas and the Eagle Ford Shale Play in disputes involving title issues, drilling operations between operator and non-operators, royalty underpayment, offset and development, cessation of production and lease termination, among other issues in the upstream oil and gas sector. Ana is also knowledgeable in matters involving state and federal oil and gas regulatory authorities includes agency hearings, examining the scope and limits of regulatory authority and providing advice about how to comply with or seek exemptions to agency rules.

Three recent Texas cases have focused on the interpretation of express offset provisions in oil and gas leases. Over the last year, the Texas oil and gas industry has experienced what some commentators have called “Shale Boom 2.0,” with increased drilling activity in South Texas and the Permian Basin, leading to some marketing bottlenecks and spikes in the number of drilled but uncompleted wells.

Whatever the
cause, at least three reported appellate cases in the last 18 months have
focused on the construction of express offset clauses in oil and gas
leases. Oil and gas landmen and lawyers
alike should take note of these decisions, as they each underscore that Texas
courts do not interpret oil and gas leases merely by reference to the
industry’s general rules, but instead on a careful analysis of the actual
language used by the parties in the lease.
And as one recent case illustrates, the “surrounding circumstances” of
the shale boom might lead to results some would not expect.